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Russian Naval Shipbuilding IS IT POSSIBLE to FULFILL the KREMLIN’S GRAND EXPECTATIONS?

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Russian Naval Shipbuilding IS IT POSSIBLE to FULFILL the KREMLIN’S GRAND EXPECTATIONS? Russian Naval Shipbuilding IS IT POSSIBLE TO FULFILL THE KREMLIN’S GRAND EXPECTATIONS? PONARS Eurasia Memo No. 395 October 2015 Dmitry Gorenburg1 CNA; Harvard University Russia’s takeover of Crimea in 2014 and subsequent reinforcement of the region’s military forces have been combined with a general increase in naval activity—including aggressive activity vis-à-vis NATO countries’ maritime interests beyond the Black Sea. All this has led to increased international interest in Russian naval modernization plans. Although this modernization effort is going slowly, the Russian Navy’s ability to place effective long-range cruise missiles on relatively small ships means that Russia remains a serious regional maritime power with the capability to threaten not only its neighbors but much of Europe in the event of a conflict. Russian Naval Construction Plans Strategic nuclear deterrence will remain the number one mission of the Russian Navy in the coming decades. For this reason, the construction of Russian nuclear submarines has received priority financing and has been largely insulated from budget cuts. The main new submarine projects include the following: • Borei-class ballistic missile submarines (SSBNs), which will replace the remaining Delta III and Delta IV submarines over the next 15 years. Three are commissioned, 3 are under construction, and 2 more are contracted. • Yasen-class nuclear-powered submarines (SSNs), which are large and expensive. One is currently commissioned and a total of 8 are planned. Only 2 are likely to be completed by 2020 due to financial constraints on construction. • New, smaller, and cheaper nuclear submarines. Two versions: one designed for protecting naval strike groups against attack submarines and the other to be 1 Dmitry Gorenburg is Senior Research Scientist with CNA Corporation’s Strategic Studies division and Associate at the Davis Center for Russian and Eurasian Studies, Harvard University. 1 armed with cruise missiles. Construction on these submarines will start in 1-2 years, with a production goal of 16-18 of them in service by 2040. • Kalina-class diesel submarine with air independent propulsion (AIP). This will serve as the successor to the Lada-class submarine. Although the head of the Navy has said that an AIP design will be complete by the end of 2016, it is unclear how much progress has actually been made. As for surface ships, the Navy is primarily building small ones at present, while finalizing designs for larger ships for the future. The main projects include: • Admiral Gorshkov-class frigates (FFG). Construction of these ships has been unusually slow even by the glacial pace of recent Russian shipbuilding. Eight are currently under construction, with the first scheduled to be commissioned this year. At the current rate of construction, the Navy can expect to have 5 ships of this class by 2025, and 9 by 2030. • Admiral Grigorovich-class frigates (FFG) (updated Soviet design). Six have been ordered to fill the gap left by the slow construction of the Admiral Gorshkov-class frigates. Construction of the last three ships has been suspended due to the end of military cooperation with Ukraine, which produced the gas turbines for these ships. • Steregushchiy-class corvette (FFC). Four ships are in active service, 7 are under construction, and 9 more are under contract. Eighteen were originally planned to be built by 2020, although delays associated with Western sanctions are likely to reduce this number to 12-14. • Admiral Bykov-class corvette (FFC). Two are under construction, with 4 more under contract and a total of 12 expected to be built over the next 10-15 years. These ships are expected to have greater range and more self-sufficiency than their predecessors. • Buyan-M-class missile ships (PFG). These small ships are designed to be used primarily in the Caspian Flotilla and Black Sea Fleet. Three are in service, 2 are in sea trials, and 4 are under construction. • Lider-class 15,000-ton nuclear destroyers (DDG). Construction is scheduled to begin in 2018-2019, with a goal of 12 in the fleet by 2035. Some analysts argue that financial limitations mean only 3-4 of these ships will be built. • New large amphibious ships (LHD). These would have at least 14,000-ton displacement and be capable of conducting expeditionary missions. Construction of these ships is likely to start before 2020. 2 The Feasibility of Russian Shipbuilding Plans Official statements related to naval shipbuilding give the appearance that the Russian Navy is undergoing a rapid revival. However, the reality is that many of these projects have faced lengthy delays and cost overruns. As a result, some of the most prominent naval procurement projects have been scaled back while others have been postponed for years at a time. The main reasons for these delays and cost overruns involve a) long-term decline in naval research and development; b) an inability to modernize the shipbuilding industry, which is considered to be particularly outdated and poorly structured as compared to other sectors of the Russian defense industry (and has suffered more than other sectors due to Western sanctions); and c) pre-existing budgetary constraints that have been exacerbated in recent years by Russia’s economic downturn. Russia’s current shipbuilding industry was primarily formed in the 1960-70s, and its ship design capabilities have changed little since the early 1980s. As a result, Russian naval research and development (R&D) has fallen several decades behind Western and Asian capabilities. Russian leaders recognized this problem in the late 2000s and sought to absorb Western knowledge through joint projects, such as the Russian version of the French Mistral amphibious assault ship. In addition, they organized joint projects with foreign designers such as Saipem, Wartsila, and STX in civilian shipbuilding. However, the freezing of military cooperation with NATO states in 2014 as a result of the Ukraine conflict has largely foreclosed the possibility of catching up by borrowing Western know-how. Russian naval R&D is therefore likely to remain significantly behind when compared to the Western state-of-the-art. Western sanctions have also resulted in major problems with the production of ship components, particularly in navigation and communication equipment. Most of these components are not produced domestically in Russia, and the industry has long been dependent on imports from Europe for high quality components. Efforts to start domestic production are underway, but prices for domestic variants are relatively high while quality is relatively low. Although it has improved somewhat in recent years, shipbuilding is one of the more poorly performing sectors of Russia’s defense industry. Russian analysts argue that Russia’s United Shipbuilding Corporation is the least effective of all state corporations in Russia’s defense sector. This results from its excessive size, bloated management structures, and misguided efforts to combine military and civilian shipbuilding under a single corporate roof. 3 Financial Constraints The State Armament Program (SAP) for 2011-2020 assigned five trillion rubles—a quarter of its total expenditures—to military shipbuilding. This amount was almost double the amount allocated to the ground forces and airborne forces combined. According to Russian analysts, currently announced naval procurement plans would require the amount of spending on military shipbuilding to increase to six to seven trillion rubles for the next SAP. That said, funding the existing SAP through 2020 was beyond the means of the Russian government even prior to the budget crisis that began in 2014. While the percentage of Russian GDP devoted to military spending increased from 1.5 percent in 2010 to 3.4 percent in 2014, this higher level of spending was sustainable for the Russian economy at the time. However, 70 percent of the program’s expenditures were scheduled for the second half of the ten-year program. Since Russia’s economic growth was already slowing, fulfilling these plans would have required Russian military spending to increase to unsustainable levels of 6-8 percent of GDP even without the cuts in Russia’s government budget required by the collapse of world oil prices. Potential Russian Navy Order of Battle, 2020-2030 The following tables are based on the Russian Navy’s announced construction plans, modified by an analysis of the financial and industrial constraints the Navy faces. These show that the Navy will substantially renew its submarines and small ships over the next fifteen years while it will just be starting on construction of a new generation of large surface combat ships. Table 1. Submarines in the Russian Navy Class 2020 2025 2030 Delta III 0 0 0 Delta IV 6 5-6 0-2 Borei 6 8-10 10-12 Sierra I & II, Victor III 0 0 0 Oscar 6 6 4-6 Akula 6 6 4-6 Yasen 2-3 6-8 6-8 New class SSGN 0 4-6 6-10 Kilo (project 877) 10-15 5-10 0 Improved Kilo (project 636.3) 6 6 6 Lada (project 677) 3 3 3 Kalina 0 4-6 6-10 4 The Russian Navy plans to have 12 SSBNs in active service by 2020. The three remaining Delta III SSBNs will be retired by this point, with six Borei-class SSBNs taking their place in the fleet. All six Delta IV SSBNs will most likely be retired in 2025-30. The Navy is planning to overhaul six Oscar-class guided-missile submarines (SSGNs) and six Akula- class SSNs, which will extend their lifespan by 12-15 years. Older classes, such as the Sierra and Victor III, will be retired before 2020. Yasen-class construction will proceed slowly, with no new orders expected after the current set of 6-8 are completed. Instead, the Navy will focus on the new class of nuclear submarines currently being designed.
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